In the Bemidji Pioneer, Republican-endorsed Minnesota lieutenant governor candidate Bill Kuisle's pushed a brilliant strategy of trickle-down economics:
. . .When asked how Minnesota's tax structure could be changed to encourage business in Minnesota, Kuisle said the current income tax is unfavorable to higher-income people, which curtails investment.
"It has to do with that upper-income bracket," he said. "I'm not saying slash the upper income bracket or anything like that, but you can't consistently raise the income taxes on the upper-income and expect them to stay in Minnesota."
Kuisle mentioned declining tax revenue as a sign the state economy still has problems. However, the the best way to increase that revenue was through increasing economic activity rather than taxes, he said. He said there are no areas in Minnesota's economy where a new tax would be viable or justified. Although Kuisle said he couldn't speak for Johnson, the candidate for governor would likely agree, he said. . . .
It's a message Kuisle is sharing across the state. In Johnson's running mate wants to improve job climate, the Republican-endorsed Minnesota lieutenant governor candidate tells the Brainard Dispatch:
. . . He decried the new upper income tax brackets that were established by law during the last legislative session and called for a climate that was conducive to economic development. . . .
So what's the problem?
In Sunday's New York Times, Nobel Prize-winning economist Paul Krugman wrote in Charlatans, Cranks and Kansas:
Two years ago Kansas embarked on a remarkable fiscal experiment: It sharply slashed income taxes without any clear idea of what would replace the lost revenue. Sam Brownback, the governor, proposed the legislation — in percentage terms, the largest tax cut in one year any state has ever enacted — in close consultation with the economist Arthur Laffer. And Mr. Brownback predicted that the cuts would jump-start an economic boom — “Look out, Texas,” he proclaimed.
But Kansas isn’t booming — in fact, its economy is lagging both neighboring states and America as a whole. Meanwhile, the state’s budget has plunged deep into deficit, provoking a Moody’s downgrade of its debt.
There’s an important lesson here — but it’s not what you think. Yes, the Kansas debacle shows that tax cuts don’t have magical powers, but we already knew that. The real lesson from Kansas is the enduring power of bad ideas, as long as those ideas serve the interests of the right people.
Why, after all, should anyone believe at this late date in supply-side economics, which claims that tax cuts boost the economy so much that they largely if not entirely pay for themselves? The doctrine crashed and burned two decades ago, when just about everyone on the right — after claiming, speciously, that the economy’s performance under Ronald Reagan validated their doctrine — went on to predict that Bill Clinton’s tax hike on the wealthy would cause a recession if not an outright depression. What actually happened was a spectacular economic expansion.
Nor is it just liberals who have long considered supply-side economics and those promoting it to have been discredited by experience. In 1998, in the first edition of his best-selling economics textbook, Harvard’s N. Gregory Mankiw — very much a Republican, and later chairman of George W. Bush’s Council of Economic Advisers — famously wrote about the damage done by “charlatans and cranks.” In particular, he highlighted the role of “a small group of economists” who “advised presidential candidate Ronald Reagan that an across-the-board cut in income tax rates would raise tax revenue.” Chief among that “small group” was none other than Art Laffer. . . .
Read the rest of the Krugman article to learn why the economist believes politicians embrace this malarkey. We don't find any evidence that Kuisle and Johnson have ever been members of the American Legislative Exchange Council (ALEC), but as the case of nonmember Dean Urdahl demonstrates, lcak of a membership card has never stopped Minnesota Republicans from embracing ALEC promoted bad ideas.
Photo: Bill Kuisle (left) and Jeff Johnson (right), the endorsed Republican gibernatorial team.
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